Lake Forest shorted tollway oasis tax revenue

Some businesses sales taxes were incorrectly recorded by Illinois Department of Revenue

February 25, 2013|By Danielle Gensburg, Special to the Tribune

Shoppers browse the stores at Lake Forest Oasis on the Tri-State Tollway. Sales-tax renvenue at the oasis is split between Lake Forest and Mettawa. (Michael Holtz, Chicago Tribune)

Mettawa is paying Lake Forest $235,000 now and about $60,000 later in sales taxes from businesses at the Lake Forest Oasis on the Tri-State Tollway that were misreported by the Illinois Department of Revenue.

The oasis houses Dairy Queen, Starbucks, Taco Bell, Subway, Travel Mart, Best Buy, McDonald's and others to serve travelers. An intergovernmental agreement between Lake Forest and Mettawa provides each community with half of the sales tax revenue generated by the businesses.

"The sales tax revenue is reported by the Illinois Department of Revenue and sent to Mettawa," said Lake Forest Finance Director Elizabeth Holleb. "Mettawa then remits the 50 percent payment to Lake Forest."

Based on the 2012 report, Holleb noticed a downward trend in Lake Forest's share. Following up with Mettawa and the Illinois Department of Revenue several times throughout the year revealed that certain businesses were not being reported accurately.

"Some of the business were being reported as Mettawa businesses and not businesses at the oasis," Holleb said. "We received a corrected report from the Illinois Department of Revenue in November 2012 dating as far back as 2009 and from that we were able to calculate the amount that Mettawa now owes us in revenue."

Holleb and Lake Forest City Manager Robert Kiely requested a check for $293,000 at a recent village board meeting in Mettawa. The Mettawa Village Board approved payment of 80 percent and withheld 20 percent pending resolution of other issues with revenue officials.

"Right now, all we receive from the state is a report with the total amount of sales tax we are to be credited for and no details linking back to the individual tax paid at each of the oasis' establishments," said Mettawa Mayor Jess Ray. "The problem we're having is trying to get that detailed report from the state, so that we can figure out exactly how much we should be paying to the city of Lake Forest. That's the only reason we fell back the 20 percent."

The same thing occurred four years ago, but then Lake Forest had to pay Mettawa. To ensure accurate reporting going forward, Holleb and Ray contacted state Rep. Carol Sente with a request that she ask the Department of Revenue for a more detailed report in the future.

"It is an issue of great importance to both communities," Holleb said. "Since we rely on these reports from the Department of Revenue, we need to make sure that they are correct every quarter and include the right businesses."

Ray and Holleb hope to have the situation cleared up by the end of the fiscal year.

"When the state messes up, as they have from time to time, it's difficult to satisfy ourselves and Lake Forest," Ray said. "If we're unable to receive a more detailed tallying, my recommendation to the board is just to pay it all and move on. Life's too short."